The Charismatic Elizabeth Holmes

Elizabeth Holmes built a 9 billion dollar company on her personality, and her personality alone. That's charisma. (Theranos is now worth zero dollars, but that's another story about corruption, fraud, deceit, empty dreams and promises, and her future prison sentence.)

My three favorite books on charisma are "Prophetic Charisma" by Len Oakes, "The Spellbinders" by Ann Ruth Willner, and "Charisma" by Charles Lindholm. There are tons of insights in each of them.

Without reading about charisma at all you would probably notice a few things about Elizabeth Holmes. She is a solid public speaker and tells a great story about her uncle getting sick. It's a great story to build a medical testing company on, which is what she did. She has a really deep voice and an icy stare. And she's extremely confident.

(None of this is bad. What's bad is that she used her skills to defraud a bunch of people by telling them that her and her company had invented new technology in blood testing. They were giving false medical reports to people and everything. She was having employees followed to keep them silent. Real sketchy stuff. The HBO documentary The Inventor: Out for Blood in Silicon Valley is good.)

Before we dive into some of the perspectives these books can give us on her personality it's important to realize that she slid down a slippery slope that's not that unique. The machine she "invented" was termed the Edison after Thomas Edison. When Thomas Edison invented the light bulb he used a bunch of other people to do the work too. He also announced that he had solved the problem before he had solved it, by four years. He also gave fake demonstrations, which is also fraud. Before his company and his life came tumbling down he and his company were able to actually invent the technology. Elizabeth Holmes and Theranos were trying to do the same thing, they just didn't invent the technology in time. To be a genius and/or super successful you usually have to cross an adaptive valley like this. You have to say you can do something that you're actually uncertain about. Then, you have to be able to do it. If you can't, you're a failure. If you succeed, you're a genius. Edison and Holmes just took it further than most people are willing to.

The first one will be fast. Charles Lindholm has a lot of great things to say. He digs into a lot of the foundations of sociology. But, he doesn't have a nice structure to think about. So, I'm just going to grab this from him. The leader and the followers need each other. Not just so they can have titles, they need each other psychologically. The leader emotionally needs the followers, and the followers emotionally need the leader. They merge together into a unit, into a whole. Being a part of something, like building amazing technology that's revolutionizing the medical industry, is engaging and makes your life meaningful. It makes sense why people are attracted to it.

My favorite one of these charisma books is "Prophetic Charisma". Let's look at the keys that Len Oakes points out and see if they apply here.

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Opposition to convention.
Enormous energy while not being frenetic.
Inner clarity and lack of fear, guilt, or shame.
Enormous confidence.
Faith in themselves that verges on the deranged.
Grandiosity that underlies the optimism and positivity.
Fearlessness that makes everything they say seem authoritative.
Blindness to others and fixation on a revolutionary vision.
A message that comes to dominate.
Focused on ultimate concerns and the reordering of the world.
Everything secondary to vision.
Inspirational rhetoric.
Moral absolutes to emphasize a sense of crisis.
Describes other's sins in absolutes and own work as relative.
Privileged insight.
Negative revelation of what is bad in the world.
Positive revelation that describes the path to salvation and the prophet's special role as guide.
Answers to existential questions.
Guidelines for successful living.
Alienate family and friends.
Always appear to be on stage.
Endlessly repeat own rhetoric.
Extreme manipulativeness.
Personal charm and warmth, frank and supportive.
Appears sensitive and concerned.
Registers people's needs and vulnerabilities and subtly implies they can fill them.
Unless the followers work and sacrifice for the vision then the work and world are doomed.
Able to go all out for an ideal.
Strives to make an impression of congruence.
Economy of movement and directness of response. Absence of pretense, flourish, or style.
Abandon all superfluous functions.
Remarkable social insight.
Detached availability.
Inner calm.
Attending to attention and readiness for depth and transcendence.
Sounding board for secret thoughts without judgment.
Great acceptance of others.
Rises above the petty things.
Does not recoil from the wretched. Classless, an unrefined quality.
The common touch. Unsophisticated and straight to the core.
An ability to be totally attentive and involved.
God's messenger.
Bold claim to be the source of ultimate good.
Heads an organization dedicated to supporting them and spreading their truth.
Ensures the daily lives are taken care of. Develops rituals for experiencing transcendence.
Challenges the most fundamental values and beliefs.

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Wow! That's just a list of traits that I gleaned from the first chapter. It isn't just a list in the book so there's quite a bit more there. But, as far as I can tell Elizabeth Holmes fills basically all of these things well.

Looking at this now I think an entire dissertation could be written on the charismatic personality of Elizabeth Holmes. But, let's just look at a few more quotes from chapter 2. Then we'll look at an interesting four point formula from Willner that Holmes fits, involving Steve Jobs.

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Thus the shaman is a "wounded healer" who has conquered a sickness and learned to use it as a vehicle for the benefit of others.

The charismatic prophet claims authority by sheer force of personality. He points to some mission outside or beyond his self that he embodies, and his mission involves the radical change of current values.

...the greater the leader's emotional depth and belief in his calling, the greater is his appeal and the more intense is his following...

...enormous yet brittle self-esteem. Lacking self-doubts, they set themselves up as leaders. Their absolute certainty makes possible great leadership but also risks total failure, for such people lack flexibility and have an all-or-nothing quality with only two options: success through strength, or destruction through defeat, suicide, or psychosis...

The follower helps the leader to realize his or her vision while using the leader for his or her own personal transformation.

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It's amazing that Oakes offers intense insights that seem to apply to Holmes on every page. He even goes over how this type of personality arises and the two ways that it can fall and why those are the two options.

A child with high intelligence suffers a trauma in the pre-teen years and copes with it by creating a narcissistic personality that won't accept limitations. That's how it starts. It sounds like Holmes might fit that origin story.

Also, in her fall her employees are a major part of what brought her down. And will probably play a big part in sending her to prison. Oakes points out why.

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The central ingredient in their relationship is trust; the followers will pay almost any price, accept almost any humiliation, for a higher purpose, but when trust is lost, every sacrifice is recalled as a score to be settled.

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That bodes poorly for her court hearing in a few days.

Now, let's look at these four things that Willner points out about charismatic personalities.

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The first factor is the assimilation of a leader to one or more of the dominant myths of his society and culture. The second is the performance of what appears to be an extraordinary or heroic feat. The third is the projection of the possession of qualities with an uncanny or a powerful aura. Finally, there is outstanding rhetorical ability.

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First, Elizabeth Holmes was a dropout from Standford University who started a technology company at 19 and wore clothes to look like Steve Jobs. Yep, that fits the modern myth of the young tech genius.

Second, Holmes got a medical patent early that was supposed to be revolutionary. Apparently it's completely unfeasible to actually use, but most people don't need to know that. She also started a medical technology company. I guess those are the early things. Over time she did many more extraordinary feats. She has a ton of awards and such.

Third, yes, everyone agrees that she has a powerful aura and presence. There's no doubt about that. You can almost feel it through the television when she's giving interviews. Her stare is something otherworldly.

Fourth, she was great at giving speeches, telling her story, telling the story of Theranos. Painting this picture of the revolutionary future that she was building.

This four part model from Willner seems to work well to me, and it's easy to think about and remember.

Never doubt how powerful a personality is. Here's a list of people that sat on her companies board of directors.

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Elizabeth Holmes, founder and CEO
Sunny Balwani, COO and a software engineer
Channing Robertson, a chemical-engineering professor at Stanford
Riley Bechtel, former Bechtel Group CEO
David Boies, a founder and the chairman of Boies Schiller Flexner
William Foege, former director CDC
Richard Kovacevich, former Wells Fargo CEO and chairman
James Mattis, later U.S. Secretary of Defense
Fabrizio Bonanni, former executive vice president of Amgen
William Perry, former U.S. Secretary of Defense
Henry Kissinger, former U.S. Secretary of State
Sam Nunn, former U.S. Senator
Bill Frist, former U.S. Senator and heart-transplant surgeon
Gary Roughead, Admiral, USN, retired
George P. Shultz, former U.S. Secretary of State

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I don't think Elizabeth Holmes started out evil. She started out with good intentions and lofty ideals. Over time she made moral compromises and slowly descended into hell. It's possible for anyone who makes those decisions.

This process of turning evil is hard to understand. There are some books on it and how it happens. But, it's still hard to understand. I think one of the best studies of it is in a tv drama show based on a book series, Poldark. In that story there is Elizabeth Chynoweth, who is a young, idealistic, and naive girl. She becomes Elizabeth Poldark, a worldly, jaded, and strong woman. Then she becomes Elizabeth Warleggan, an evil, fearful, resentful, paranoid, opium addict. It's little decisions that lead to other decisions. It's a slow chipping away at the soul that's hard to study, but it happens to people every day. It's small moral compromises that erode humanity.

Elizabeth Holmes is probably the most interesting story about the rise and fall of a charismatic personality in this century. I'm sure many books and movies will be made about her life story. It's an incredible one.


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